Massachusetts Eyes Tough Mortgage Fraud Law

BOSTON – Gov. Deval Patrick, dealing with the highest foreclosure rate in the state’s history, filed legislation yesterday which would criminalize mortgage fraud, bar foreclosure rescue scams and create a central repository on foreclosures. The bill, the result of a broad industry task force that included credit union representatives, would require lenders provide homeowners with an intent to foreclose and a right to cure a default. The notice of intent to foreclose would have to be filed with the state Division of Banks. The bill would also require lenders who steer borrowers to subprime ARMs to allow the borrowers to opt out of a fixed-rate loan. “We must help homeowners facing foreclosures,” said Gov. Patrick. “The problem is complex and requires a comprehensive approach that provides for greater education and information for consumers before securing a mortgage; a more responsive legal framework for homeowners facing foreclosure, and clear consequences for those who engage in mortgage fraud.” The state is also exploring other efforts to rescue homeowners, including a multi-million dollar fund that would provide low-cost refinancing.